Lawmakers forcing economic-development accountability

November 18, 2012|Aaron Deslatte, Capitol View

TALLAHASSEE – Florida's economic-development strategy for years has been a taxpayer-financed piggy bank handing out big bucks to companies that made grand job-creation promises and were seldom held accountable for their flops.

That's been changing recently – slowly, painfully and in fits.

Last year, the Orlando Sentinel reported that during the past 16 years, more than 1,600 job-creation deals were signed with companies that promised to generate more than 224,000 new jobs in exchange for $1.7 billion in tax credits, rebates and other incentives.

But because Florida's economic-development agency had done a shoddy job of tracking their performance, the state could confirm that only about 80,000 jobs were created and $738 million paid out. About 40 percent of the deals never resulted in a single job.

Since then, at the insistence of Republican and Democratic legislators:

Gov. Rick Scott's year-old Department of Economic Opportunity and Enterprise Florida have started implementing contracts with "clawback" provisions to help them recapture public dollars when the terms of contracts aren't fulfilled. For instance, Attorney General Pam Bondi is suing a defunct Washington software company, Redpine, after it took $750,000 in taxpayer cash in 2011 to open a Panama City office, then promptly closed.

DEO scrapped its contract with Miami-based Sharpton, Brunson & Company, P.A, an outside auditor that a state inquiry determined hadn't contacted or surveyed companies frequently enough to track their performance. DEO wanted to take this tracking in-house, but incoming Senate President Don Gaetz, R-Niceville, Democratic Leader Chris Smith, D-Fort Lauderdale, and other lawmakers blocked the agency from doing so. The company is currently trying to find another outside auditor.

DEO has also taken a tougher tone with some of the entities it fuels with economic-development cash. For instance, DEO told the Black Business Investment Fund of Central Florida last week that it was pulling its certification for state funding for a minority-business loan program because of a "significant deficiency" in its bookkeeping.

This is a dispute that has been going on for years between the state and the constellation of minority-business investment entities in Jacksonville and Orlando. The Orlando BBIF stands to lose about $284,000 in state funds over a dispute about how much it was charging the state to administer an "economic gardening" small-business job-creation program created under Gov. Charlie Crist.

Lastly, the agency has created an online portal at http://www.floridajobs.org, which provides information on incentive deals, including how many jobs the deals were required to create, what companies have actually done, and how much they've been paid. Although it's been a year since lawmakers first directed DEO to create the portal, the site still has only 288 of the 1,600 projects up – and most are ones that have performed well.

As Gaetz described the contents, "I'd like to tell you about the weight I lost and not the times I slipped off the wagon."

Gaetz takes the reins of the Senate next week and is intimating that a broader review of Florida's economic-incentive "tools" is in the works – and that Democrats like Sen. Eleanor Sobel, D-Hollywood, will be central players.

This is happening at the same time that Enterprise Florida, the public-private arm of the state's economic-development effort, is hoping to ask lawmakers in the 2013 legislative session for more incentives.

With heavyweight issues cooking for next spring – Medicaid expansion, ethics reform, higher education changes – it'll be interesting to see whether economic-development deals land somewhere on a back burner.